A conventional loan refers to any loan that is not insured or guaranteed by the federal government, as opposed to government-insured loans including Federal Housing Administration (FHA), U.S. Department of Veteran Affairs (VA) and U.S. Department of Agriculture (USDA). Conventional loans (whether conforming or not) typically have a slightly higher down payment than government loans; however, this loan option normally provides more flexibility with fewer restrictions.
If you have good credit and stable income, a conventional loan might be the right option for you since it offers:
Lower interest rates for borrowers with good credit
Flexible mortgage insurance options
Fewer penalties and fees
Flexible loan terms
CONVENTIONAL LOAN PROGRAMS
Fannie Mae creates affordable housing opportunities throughout the country. We expand access to affordable mortgage loans and multifamily housing for millions of people across the U.S.
Freddie Mac keeps mortgage capital flowing by purchasing mortgage loans from lenders so they in turn can provide more loans to qualified borrowers. Our mission – to provide liquidity, stability and affordability to the U.S. housing market in all economic conditions – extends to all communities from coast to coast.